Wednesday, August 4, 2010

(Updates throughout with details on emissions business, regulatory outlook.)
By Jacob Bunge
Of DOW JONES NEWSWIRES
IntercontinentalExchange Inc. (ICE) is examining the future of its new U.S. emissions-trading business after the collapse of climate change legislation.

The energy and commodity trading specialist acquired the Chicago Climate Exchange as part of its $597 million purchase of London-based Climate Exchange PLC, which also runs profitable emissions units in Europe.

"The business was built out with expectation that cap-and-trade in the U.S. was imminent," said Scott Hill, ICE's chief financial officer.

Hill said when ICE started to examine its move into emissions trading it was not unreasonable to expect that the U.S. would pass legislation.

ICE has been one of the most astute consolidators in the exchange sector, acquiring access to soft commodity markets and credit derivatives just before a surge in demand for both products.

Chief Executive Jeff Sprecher said the Chicago-based unit of Climate Exchange is losing money, and ICE plans to scale back the operation and re-evaluate its future.

His remarks came as ICE beat expectations with a 41% rise in second-quarter earnings amid record revenue from buoyant trading.

Sprecher said that ICE's interest in owning the Climate Exchange focused on its European business, up 26% year to date through July. Opportunities exist to lure energy and utility companies that are traditional users of ICE's energy markets to the emissions side, he said....MORE

At one point Goldman owned 19% of CLE although in the last shareholder report I didn't see them mentioned. They may be using nominees.
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